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TICKERS: CCO; CCJ

Uranium Major to Get US$300M Tax Refund
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While this is a positive development in the Canadian producer's longstanding tax dispute with the Canada Revenue Agency, the amount is only 39% of the total at issue, noted a Canaccord Genuity report.

Cameco Corp. (CCO:TSX; CCJ:NYSE) is to get a tax refund of about US$300 million (US$300M) from the Canada Revenue Agency (CRA), which is the partial resolution of an ongoing dispute that began in 2008, reported Canaccord Genuity analyst Katie Lachapelle in a March 27 research note.

The analyst explained that the CRA revised certain tax assessments imposed on and remitted by the Canadian uranium producer for the years 2007 through 2013. This resulted in a credit owed to Cameco and the now-pending refund, to be issued in cash (US$89M) and letters of credit (US$211M). When it will happen is unknown.

A Favorable Sign

Lachapelle highlighted that US$300M is only 39% of the amount Cameco disputes, but the refund is an encouraging development.

"We believe the receipt of this US$300M million is a positive indicator for the long-running dispute with the CRA and suggests it is likely that Cameco will be successful in recovering the full amount," Lachapelle commented.

About US$480M remain, which, the analyst noted, pertain to "a transfer pricing adjustment of US$3.25 billion for the 2007 through 2013 tax years related to the sale of Canadian-produced uranium by [Cameco's] foreign subsidiary."

Buy Rating Maintained

Canaccord Genuity has a Buy rating and a CA$48 per share price target on Cameco, the current share price of which is about CA$33.06.


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Disclosures For Canaccord Genuity, Cameco Corp., March 27, 2023

Analyst Certification Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research, and (iii) to the best of the authoring analyst’s knowledge, she/he is not in receipt of material non-public information about the issuer. Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity LLC and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Required Company-Specific Disclosures (as of date of this publication) Canaccord Genuity or one or more of its affiliated companies is a market maker or liquidity provider in the securities of Cameco Corporation or in any related derivatives. Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Cameco Corporation in the next three months.

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